Nothing brings out the shamelessness of Washington politicians like rising gas prices, and President Obama is the latest case. His Justice Department on Thursday announced a task force to investigate oil industry prices and practices for fraud. But if there is fraud here, it is that, in an attempt to appear to be doing something about inflating gas prices, the president and Republicans in Congress continue to fuel the myth that the federal government might, with an investigation here or plans to drill there, affect the short-term world-market price of a commodity America doesn't and never will control.
If Obama's new investigation sounds familiar, that's because it's exactly what President Bush and the GOP Congress did in 2005 and 2006. “Price gouging” was the phrase then, and Congress directed the Federal Trade Commission (FTC) to spend “no less than $1 million” rooting out miscreants in the oil industry who might have been using hurricanes in the Gulf of Mexico as pretext to raise prices unreasonably. It was a waste of money. Not only did the FTC conclude that there was no widespread price gouging, it had a tough time even finding credible complaints of price manipulation.
Nevertheless, Bush directed the Justice Department and the FTC to try again during the spring and summer of 2006. The resulting report concluded, again, that there wasn't any conspiracy among American refiners or retailers to raise gas prices; instead, higher costs were the result of all the mundane sorts things that usually affect supply and demand for gasoline: The spring and summer driving season; tight crude supplies; refinery damage after punishing Gulf hurricanes; and rising ethanol prices. That is, Slate's Jacob Weisberg pointed out at the time, oil refiners and retailers were merely engaging in capitalism — selling their goods for the highest price the market will bear. Just in case Bush and Congress didn't get the message, the FTC curtly insisted that, "further investigation of the nationwide 2006 gasoline price spike is not warranted."
Does Obama really think that his administration will find anything fundamentally different about the sorts of factors that are pushing gas prices up now?
Beginning his gas prices tour last month, the president tried to sell his energy plans as more honest talk from the White House. Obama admitted that he couldn't lower gas prices immediately, and he said good things about auto efficiency and conservation. But he has since wandered into the realm of the incredible in his search for political cover, claiming that his policies would reduce volatility in the oil market in “a couple years,” and now this move on price manipulation, a desperate and likely ineffective palliative for voters upset about what they're paying at the pump.
Still, you can't entirely blame the president. The latest polls indicate that Americans are souring on Obama, in part because they are paying more for gas, and Republicans are cynically encouraging this nonsense. National Journal reports that GOP lawmakers are passing bills and holding hearings that won't result in actual laws, but will allow them to bash Democrats on gas prices, which they plan to make a major theme heading into the 2012 elections.
Among other things, they are preparing to hit Democrats for not supporting a trio of bills from the House Natural Resources Committee that would expand offshore drilling . More offshore drilling isn't a bad idea in the long term, but these would do nothing to lower current gas prices. Nevertheless, Natural Resources Chairman Doc Hastings tried to make that case earlier this week, concocting a bizarre theory that the possibility of America drilling a lot more a decade from now would overwhelm any sense of supply and demand in the present. That's junk economics, but it makes for great political attacks.
The Republicans' gas-price campaign should also be familiar. Liberals tried something similar during the previous administration, when they blamed higher gas prices on Bush's foreign policy. Gas prices are an all-purpose club that both parties have used with depressing predictability to enhance their attacks on opponents, seemingly whatever those critiques might be.
Rising gas prices simply aren't Barack Obama's fault. Just as they weren't George Bush's fault. And Americans need to get used to factors affecting gas prices that aren't in America's control, particularly that the developing world will demand more oil as nations such as China and India grow their economies. That's not ideology; it's supply and demand.